Lecture 3 Ecosystem Services & Environmental EconomicsQuestions for Today:PowerPoint PresentationSlide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Lake Victoria introductionSlide 25Slide 26Slide 27Sequoia National Forest, CaliforniaSlide 29Slide 30Slide 31Slide 32Slide 33Option value for medicines & drugs?Slide 35Slide 36Slide 37Slide 38Slide 39Slide 40Slide 41Slide 42Lecture 3Ecosystem Services & Environmental Economics•ECOL 1000: Ecological Basis of Environmental Issues•University of Georgia•Spring 2015Questions for Today:•What goods and services are we currently receiving for “free” from the natural world?•What decisions should be made to ensure the world will provide these things for future generations?•How do we place value on the natural world?1994 Atlanta-based Interface Carpet was leading seller of carpet tiles, led by Ray AndersonOver $1 Billion/ year salesPetroleum based carpets, with significant amounts of air & water pollution6 tons of landfill waste per day!But, the company complied with environmental lawsDid the company “get” environmental awareness? Founder Ray Anderson read “The Ecology of Commerce” by Paul HawkenRay then had an epiphany:“You can’t go on consuming more than your environment is able to renew. We’re on the wrong side of history, and we’ve got to do something”Ray Anderson – The Business Case for Sustainability videoLand needed to provide resources and assimilate wasteEcological Footprint:What was the Ecological Footprint of the Interface Carpet factory? That is, how much land was needed to provide its resources and assimilate its waste?Ecological footprints of populations are determined by its 1) size, and 2) amount of resources used per personUSA •Population 300 million•~2 billion acres of land•Footprint of each of us ~ 24 acres/person CHINA•Population 1.3 billion •~2 billion acres•Footprint ~ 2 acres/personOXYGEN / TIMBERNatural capital- range of natural resources provided by ecosystemsFOODENERGY / FUELGoal: build a sustainable, environmentally sound businessAnderson began to recognize that we must not only minimize our impact on nature, but also understand that our resources come from natureIf we are using our natural capital more quickly than it is being replaced, where will future income come from?Change in normal business plan & increases in technology can save resources and money!One method Interface used was “biomimicry.”That is, have products imitate nature …They removed glues from carpets and replaced them with “gecko” lizard technology.Between 1994 – 2006, Interface Carpets made major changes:Fossil fuel use declined by 55%Total energy use declined by 43%All costs of energy saving “tricks” have been recouped SkylightsSolar tubesEfficient heatingBetween 1994 – 2006, Interface Carpets made major changes:Increases in technology can save resources and money!TacTiles adhesive allows customers to replace small pieces of damaged carpetBetween 1994 – 2006, Interface Carpets made major changes:Increases in technology can save resources and money!Only 5% of the 5 billion pounds of carpet pulled yearly was being reused; new technologies developed to recycle carpet. 100,000 tons of waste diverted from landfills!•Eliminate waste•Benign emissions•Renewable energy•Closing the loop•Efficient transportation•Sensitizing stakeholders•Redesigning commerceWhat was Ray Anderson’s pathway to sustainability?The welfare of humans depends on maintaining ecological system functionsEcosystem services:Conditions and processes of natural ecosystems and species that provide some human value. For example: pollination by bees or windWhat should be a human goal? Sustain current resource yields and minimize negative impacts resulting from management, extraction, and use of resourcesMore waterMore water ( trees prevent evaporation ) ( trees prevent evaporation ) Cleaner waterCleaner water ( healthy soils are filters ) ( healthy soils are filters ) More Biomass More Biomass ( diversity promotes production )( diversity promotes production ) Less COLess CO22 ( plants photosynthesize ) ( plants photosynthesize ) More OMore O22 ( plants photosynthesize ) ( plants photosynthesize )Cowetta, NCHydrologic StationFindings from study:Diverse forested habitats produceEcological Economist Robert CostanzaEcosystem services of honey beesColony Collapse Disorder…But, its not just honey we’re losing…What are additional economic costs of the loss of honey bees?Decline in water resources: Aral Sea-Diversion of inflowing rivers to provide irrigation water for local crops-Potential to disappear by 2020-Salt concentrations increasing-Fishing has ceased-Drinking water quality declining-Concentration of toxins & increase of disease61,000 km2Lake Victoria & Nile perch introductionLoss of ecosystem services due to introduced speciesLake Victoria introduction•Nile perch introduced in 1950s•Linked to extinction or near extinction of several hundred native fishes•Cichlids ~80% of biomass up until 1970s and by 1980 comprised only 1% of biomass•Local fisherman pushed out by large commercial operations•Secondary consequences: forest loss due to tree clearing for firewoodBycatch: Non target species that get captured and discarded, often after they are deadWorldwide fisheries discard 25% of their catch. For every pound of shrimp caught in a trawl net, an average of 2-10 pounds of other marine life is caught and discarded.Turtle Excluder Device (TEDs). Costs vs. Benefits of TEDsWhy do mainstream economics support some business practices which are not sustainable (for example, Interface Carpet Company)? Because mainstream economics DO NOT account for all costs.Interface Carpet has internal costs associated with material for carpet production, such as the cost of the materials. But, what about:•Environmental costs with drilling for oil needed to produce carpet? •Costs associated with cleaning up the pollution? There is a problem with these external costs!Externalities are costs that businesses do not directly pay, and therefore are not reflected in the $ price the consumer pays for the product. For example: •Are there associated diseases with production of product? •Is there environmental degradation? •Other people and species pay these